Rupee rises 8 paise to 84.38 against U.S. dollar in early trade

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The rupee recovered from its lowest level and appreciated by 8 paise to 84.38 against the US dollar in early trade on Monday (November 18, 2024) despite a stronger American currency and sustained outflow of foreign funds.

Lower level of crude oil prices in the international market supported the recovery of local unit, forex traders said.

At the interbank foreign exchange, the rupee opened at 84.42 and strengthened further to 84.38 against the greenback, trading 8 paise higher from its previous close.

On Thursday (November 14, 2024) the rupee fell 7 paise to settle at its all-time low of 84.46 against the US dollar. Forex markets were closed on Friday on account of Guru Nanak Jayanti.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.06% at 106.68.

Brent crude, the global oil benchmark, rose 0.51% to $71.40 per barrel in futures trade.

Analysts said that India’s inflation surge is putting additional pressure on the currency. Also, they said the record surge in the US Treasury yield has added strength to the dollar index.

Wholesale price inflation in India rose to a 4-month high of 2.36% in October as prices of food items, especially vegetables, and manufactured goods turned dearer, according to government data released on Thursday.

Retail inflation breached the RBI’s upper tolerance level, soaring to a 14-month high of 6.21% in October mainly on account of rising food prices.

On the domestic equity market front, Sensex was trading 125.08 points, or 0.16% lower, at 77,455.23 points. The Nifty fell 20.15 points, or 0.09%, to 23,512.55 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 1,849.87 crore, according to exchange data.

The latest government data released on Thursday showed India’s merchandise exports in October rose by an impressive 17.25% year-on-year, highest in over two years, to $39.2 billion, while the trade deficit widened to $27.14 billion on a sequential basis.

Meanwhile, the country’s forex reserves dropped by $6.477 billion to $675.653 billion for the week ended November 8, the RBI said on Friday.